Thailand is being urged to restructure its agricultural sector, as the country’s primary farm products can no longer compete in the world market.
Experts say reforms should include controlling the supply of each commodity, creating cultivation zones for each crop, and adding value to farm output.
Zoning restrictions can help to control supplies and improve yield quality to meet demand in niche markets, resulting in higher value and more income to growers of such crops as organic Hom Mali rice and organic vegetables.
Arkhom Termpittayapaisith, secretary-general of the National Economic and Social Development Board, said adding value to farm products would foster sector sustainability.
Prices of local crops such as rice, rubber and sugar now depend on global markets and supply, prompting the government to intervene whenever prices plummet.
This year, agricultural prices dropped by 9.3% year-on-year in the second quarter alone on the slowdown in the world market, hurting local farm incomes.
Thailand now ranks second globally in exports of sugar.
Since most of this commodity is shipped as a primary product, the industry should find ways to increase value such as developing high-quality sugar tailored to particular markets.
Mr Arkhom said Thailand risks losing its status as a major rice exporter as more Asian countries become self-reliant in terms of the crop.
Vietnam has rapidly developed its agricultural sector and can beat Thailand’s rice prices.
Even as coffee consumption grows in Thailand each year, the country remains a net coffee importer. Several coffee growers have shifted to other lucrative plants such as rubber and oil palm because of their higher market prices.
Varri Sodprasert, president of the Thai Coffee Association, said Thailand’s coffee production has dropped continuously the last five to six years, with production this year estimated at only 41,000 tonnes.
Coffee has been grown in Thailand for over 100 years. The country officially became a coffee exporter in 1976, selling 850 tonnes of robusta coffee. Helped by strong world market prices in the 1980s, exports thrived, culminating in a peak in 1991-92 of almost 60,000 tonnes.
The collapse of the “International Coffee Agreement” in July 1989 and the following slump in world coffee prices hit farmers hard. Facing an oversupply, the Thai government initiated a five-year plan starting in 1992 to encourage coffee farmers to switch crops, reducing the coffee plantation area from almost 500,000 rai.
Coffee plantation is estimated at 300,000 rai this year, with about 260,000 rai for robusta beans and 39,000 rai for arabica, said Peyanoot Naka, senior research officer at the Agriculture Department.
Robusta coffee growers are mostly in the South, where plantation area is expected to drop from 287,000 rai as more farmers shift to rubber and oil palm.
But arabica strains, grown mostly in the North, are expected to increase plantation given relatively high prices.
The ex-farm price of arabica is now at 150 baht per kilogramme, while the related price of robusta is 72 baht per kg.
Domestic consumption is estimated at 70,000 tonnes a year. Thailand imports at least 5,000 tonnes to supply instant coffee makers.
THIS summer’s weather may be a let-down, but Sydneysiders can enjoy some of the lowest fruit and vegetable prices in years.
”You better believe it … I’m selling four mangoes for $5. Last year it was two for $5,” said Frank Vecchio, owner of the Wynyard Park fruit stand in Sydney’s CBD. In his 20 years of business, Mr Vecchio said he has not seen such quantities of produce at fruit and vegetable wholesale markets.
The chief executive officer of NSW Chamber of Fruit and Vegetable Industries, Colin Gray, said the oversupply was caused by a decline in consumer demand due to the recent unseasonal wet weather. Consequently, wholesale and retail prices have fallen.
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”The problem with the weather is that people are not buying as much, not enjoying barbecues with the fruit and salad bowls,” Mr Gray said.
In particular, the cooler weather has not enthused customers to buy traditional summer fruits such as mangoes, stone fruits and watermelons, according to Bill Chalk, wholesaler and partner of Southern Cross Produce.
He said wholesale prices for mangoes were $1-$2 per kilo compared with $5 per kilo last year and white peaches were $1-$1.50 per kilo, the lowest in years.
”The lower prices are a great thing for the public but it’s heartbreaking for the farmers,” said Mr Chalk,